Trade Group Finds 10,000 Fast Food Jobs Lost Since New $20 Minimum Wage Law – California Globe

According to new findings by the California Business and Industrial Alliance (CABIA), the state of California has lost just under 10,000 fast food jobs since AB 1228, the new $20 minimum wage for fast food employees was first signed into law late last year.

Following the signing of AB 1228 in October by Governor Gavin Newsom ushering in the new $20 minimum wage, a massive jump from the $16 minimum wage, has had multiple companies take extreme measures. Some, like Chipotle and McDonalds, have announced already raised prices before the wage raise date of April 1st. Others are investing in automated kiosks and other automated devices to help reduce the number of employees. Some stores outright closed.

Most notable, however, has been the massive amount of layoffs. Over 1,200 Pizza Hut drivers have had announced lay-offs, and were replaced by services such as DoorDash and Uber Eats. Roundtable Pizza has also done the same with many of their delivery drivers, with many other chains also quietly doing the same for deliveries in the following months, as seen by the jump of fast food businesses on food delivery sites.

As the economic effects took a toll before the law was even in place, lawmakers scrambled to mitigate the damage. AB 1228 bill author, Assemblyman Chris Holden (D-Pasadena), created a new bill to grant numerous exemptions in an attempt to lighten the economic blow of AB 1228, including to fast food restaurants in airports, stadiums, casinos, events and corporate campuses. However, as the Globe noted, AB 610 does anything but cleanup the mess caused by AB 1228. While it was passed, closures still continued. Most were smaller scale layoffs with a handful of employees being let go from certain locations. However, some were larger scale closures, such as the Rubio’s Coastal Grill closures that occurred over the weekend.

During this entire time, from signing in September 2023 to adoption in April to today, the question of how many employees were affected has remained. State figures won’t tell anything until next year, while exact numbers of layoffs per restaurant location has been largely muddled because of some locations normally firing people or hiring employees or new locations opening.

However, CABIA gave the first figures on how many jobs have been lost to AB 1228 so far earlier this week, with the trade group saying that nearly 10,000 jobs have been lost so far. CABIA President and founder Tom Manzo said on Wednesday that, even before AB 1228, California businesses were struggling for years because of state regulations.

10,000 jobs lost due to AB 1228

“California businesses have been under total attack and total assault for years,” said Manzo. “It’s just another law that puts businesses in further jeopardy. Nearly 10,000 jobs have been cut across fast food restaurants since Newsom signed the bill into law last year. Officials are living in a fantasyland by thinking that drastic wage increases will help workers or businesses. You can only raise prices so much. And you’re seeing it. People are not going to pay $20 for a Big Mac. It’s not going to happen.”

Others in the industry told the Globe on Thursday that layoffs would likely continue as automation and new, leaner shifts continue to grow.

“It adds up over time, doesn’t it?,” explained Chris Kelly, a job placement specialist who helps food service workers transition into other careers, to the Globe on Thursday. “Like I said on Tuesday, Rubio’s was an odd case. The reason you haven’t heard of all these firings is because it has been quiet. No on says anything about 4 or 5 people let go in one place. But add that up through a lot of locations, and look at that, 10,000 jobs.”

“And the sad thing is a lot of those people needed these jobs. Some are kids getting their first summer job or paying for college. Others are people in need of a second or third jobs to make ends meet. Others need to supplement retirement, or worse, need to work still because they have no retirement.”

“We’ll look at state figures when they come out, but through CABIO’s findings, it is at 10,000. That’s a lot of jobs people needed. That’s a lot of people facing eviction now or having to decide between food and medicine. That’s a lot of people who lose out on valuable job experience. You’re hurting every generation from Gen Z to the Silent Generation here. This was such a destructive law, and now we are starting to see the first figures from it. And they are not pretty.”

Manzo also said that “It’s a starter industry. You get a job as a kid working in a fast food restaurant and you learn some good work ethic and that takes you into life.”

More figures, such as more job loss numbers and store closure numbers, are expected to come out soon.